American Sociological Review

Roughly put, profit (or loss) is the difference between what it costs to sell a product/service and what is received for that product/service. For example, if it costs me $1 to make and transport a widget to the purchaser and the widget sells for $5, then I would make a profit of $4 on each widget sold. Naturally, the overall profit of my widget business would be a more complex matter involving total costs, total income and so on. But the basic idea is profit is what one gets when the cost is lower than what is received for the product/service.

As a general rule, just as Trix is for kids, profit is for employers and not employees. In fact, the stock criticisms of profit tend to focus on the fact that making a profit often involves paying workers less than the value they produce. So, on the face of it, it seems like the idea of a worker making a profit is a non-starter. After all, the worker gets paid (hopefully) and the mechanism of a profit does not seem to figure in here. However, it seems interesting (though perhaps totally misguided) to consider the matter of a worker making a profit (as a worker, not in another role).

As noted above, profit occurs (crudely put) when the seller makes more for a sale than the sale costs her. One way to look at this is that the value paid by the purchaser exceeds the value of what is sold. In the case of a worker, it would seem that a profit-like situation would arise when a worker is paid more than the value of her work. That is, I would make something profit-like if I were paid more than I was worth. The gap between the value of my work and what I receive for it would be my “profit.”

In either case, it would seem that making a profit generally entails that someone is getting exploited. After all, if all those involved in producing the product got their just share of the value of the product, there would be no surplus left to provide the profit, unless the customer pays more than the value of the product. Likewise, if the worker is paid more than the value of her work, it would seem that she is exploiting the employer.

It can be countered that profit can arise without exploitation. One way for this to occur involves what could be called relative/subjective (or perceived) value. For example, if it costs me $1 to make a widget and I sell it for $5, yet the customer values it at $5 (or more), then it could be claimed the customer is not being exploited. After all, as she sees it she is getting her money’s worth. However, it would also need to be the case that the workers involved in producing, transporting and selling my widget also regard themselves as properly compensated. Likewise, if a worker values her work less than the employer values it, then it could be claimed that the employer is not being exploited. For example, if I valued my time at $30 an hour, but I was paid $50 an hour and my employer valued my time at at least $50 an hour, then I would not be exploiting my employer. Or, perhaps more accurately, she would not regard me as exploiting her.

The response to this is to contend that a person can be wrong about being exploited. In the case of a worker, he might regard his pay per widget as fair, but might be mistaken. One obvious cause could be ignorance: the worker is unaware of the value her labor adds to the product and if she were aware of this, she would change her mind about the fairness of her pay. Likewise for an employer: she might believe she is getting her money’s worth (or better) but be wrong about this because I am so very clever about appearing to be worth more than I am actually worth. Naturally, it could be insisted that in matters of money all value is relative/subjective (or perceived) and that the idea of some sort of objective foundation for claims about exploitation is fundamentally mistaken. If so, this would also entail that the idea of some sort of objective foundation for claims about fair or just profits would also be fundamentally mistaken. Presumably it would come down to whoever had the most power defining what is called “just” and what is called “unjust.” In this case, it would seem most sensible for each party to endeavor to get as much as he can and to get it labeled as “fair” and “just.” That is, the employer should endeavor to get as much for as little pay as possible from employees and employees should endeavor to get as much as possible for as little work as possible from the employer. That is, in a profit focused system everyone should try to exploit everyone else while contending that they are being fair.